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Thursday, April 12, 2012

The ebook tipping point

There have been several major events happening in the ebook realm that seem to be building to a convergence that will have a major impact on the future of both the publishing world and libraries. Let's look at the players.

THE USER:

Pew Internet released a report on April 4 on the rise of rise of e-reading. There are four points that I think are of particular interest to libraries.

The first comes as no surprise. The number of people reading e-books has increased. To measure the impact of holiday gift giving, Pew performed their survey in mid-December 2011 and again in February 2012. In mid-December, the number of people who have read an ebook in the last year was 17%. In February that number increased to 21%.

E-books readers tend to read more books. They read an average of 24 books over the last 12 months compared to 15 books for print readers.

Both publishers and libraries need to really take note of the following: ebook readers are frustrated by the lack of available content or the difficulty of getting content. One of the things that appeal to them about e-books is the ease of access. Making access difficult, or impossible in some cases, will not make for happy customers.

Most interestingly, ebooks readers are more likely to buy content than to borrow. 61% e-book readers would rather buy as opposed to 54% of print readers who would rather buy than borrow. Libraries, are you listening?

PUBLISHERS:

The Big Six publishers seem to be struggling with the concept of ebooks. They are trying to force the print paradigm upon digital content rather than viewing it as a different beast. They give the impression of a gaggle of Chicken Littles clucking that the sky is falling.

Harper Collins is probably the most famous for instituting the 26 check-out limit on library ebooks. They are attempting to simulate the wearing and replacement of physical book in libraries.

Penguin is now they are taking their dispute with Amazon out on libraries and making it more difficult for library users to borrow Kindle titles through Overdrive. Kindles (with the exception of Kindle Fire) must be connected to the computer and the library title sideloaded. This can be a major hassle to people accustomed to do everything wirelessly. Refer to number 3 above. This is after pulling their books from Overdrive and than adding them back.

Random House has increased their ebooks prices to libraries by 300%. Apparently they have not been reading the news stories about shrinking library budgets.

Simon & Schuster and Macmillan don't even allow libraries to lend their ebooks. It is a shame as they are missing a ton of free publicity. Who better to promote a book than a true bibliophile?

I would like to see some solid studies that show the effect of library lending on the purchase of books. I know that many library users will discover a new author through the library or purchase titles they loved but originally read at the library. However, I am not aware of any official study that supports this assumption. Does anyone know?

AMERICAN LIBRARY ASSOCIATION:
Over the last few months, the American Library Association has begun discussions with publishers. Among the many goals of ALA were the desire to educate publishers regarding library use of ebooks (no, not everyone with access to the internet is allowed to check out ebooks) and to find a mutually agreeable business model that was flexible for the many different types of libraries and affordable. ALA has also raised issues such as user privacy and digital preservation though not information has been given regarding those discussions.
I recently had the opportunity to ask Molly Rapheal, the president of ALA, some questions regarding this topic. One of my main concerns was the publishers talk of creating 'friction'. They want to simulate the print book check out process by forcing the users to physically be present in the library to check-in and check-out ebooks. The publishers are hoping that readers will be more likely to buy the book rather than go through the trouble of borrowing it. umm..well...of course, but again refer to #3. Molly assured us that ALA is trying to persuade publishers that this was not the best course of action.

AMAZON

Amazon has been a very active player in the ebook field. It could be argued that the release of Kindle is responsible for the surge in popularity of ebooks. One would think that this would excite publishers, but the relationship between Amazon and publishers has been anything but rosy. This is due in main to Amazon trying to sell ebooks at the low price of $9.99. To say the publishers balked at this price would be to understate the situation. Publishers were concerned that they would not be able to sell print books at their full price. (More on this topic in a moment.)

Amazon also became competition. They began allowing and even encourage authors to self-publish through their site. With the advent of ebooks, self-publishing was already starting to grow. With Amazon offering services to facilitate the process, it has become even a more appealing option to many authors who either can't find a publisher to pick them up or are disgruntled with publishers treatment.

OVERDRIVE

With the surgence in the popularity of the Kindle and other ebook readers, public libraries have jumped on the bandwagon. Unfortunately, there is only one main wagon at this point - Overdrive. Overdrive has not been completely successful with their relations with publishers. Many publishers were upset when Overdrive began to offer Kindle versions of their books. The publishers felt it violated terms of their contracts because the library user had to leave the safety of the Overdrive firewall and travel to the Amazon site to complete the library check-out process. Many libraries also had concerns though their concerns focused on the privacy issues of the library user.

APPLE

Into this fray steps Apple. iPad became competitors to the Kindle as some customers wanted a device that does more than just read a book. Who wants to carry multiple devices when you could have one that does it all. This led to Apple adding ebooks to their line-up of offering with iBook. Apple then approached the publishers with the offer of agency pricing or letting the publisher set the prices of ebooks. There were two caveats. Apple wanted a 30% cut, and they also required a signed agreement stating that the publishers could not sell to another vendor at a lower price. This raised the prices of ebooks to around $12.99, and it also caught the attention of...

DEPARTMENT OF JUSTICE

On April 11, the Department of Justice (DOJ) brought a lawsuit again Apple and five of the big publishers for price fixing. The DOJ has already settle with three of the publishers, HarperCollins, Simon & Schuster and Hachette. The three publishers must now allow other vendors such as Barnes and Noble and Amazon to set their own prices. Apple along with Pearson and Macmillon have decided to take the suit to court. Initially, the lawsuit should create lower prices for ebooks, however, it has not affected Apple's stock prices. Ebooks are a very small piece of the Apple pie, and investors still feeling fairly confident in Apple's ability to weather the storm. I am very interested in the outcome of the suit and what the resulting repercussions will be.

~~~~~

With the convergence of these different events,the ebook arena seems to be reaching a tipping point. The two industries that could be affected the most are the publishers and the libraries. Publishers should cue into recent history and learn a lesson from Borders. Borders was late to join the ebook game and never seemed really completely embrace it. They are now out of business. Apple and Amazon are increasing the competition that publishers face making the possibility of them collapsing even greater. While the publishers may not be in immediate danger of collapsing, it is a possibility with which we should contend. The publishers will either redefine their business model regarding ebooks, or their future outlook is bleak.

Libraries will also be impacted by a tipping point. If publishers succeed creating a new business model, then libraries must prove to publishers that libraries are indeed an integral part of publishers' success. (Again, formal studies would be of benefit.) If the publishers collapse, or even if they succeed, it may be time for the libraries to reexamine their own paradigm. Traditionally libraries have purchased titles from a vendor or direct from a publisher based in large part upon reviews or demand for subject matter or titles. With ebooks, this has morphed into a leasing model where libraries purchase the rights to access the content, but they do not own it and cannot resell it. Some libraries are now exploring hosting content themselves and buying direct from authors or even exploring the creation of content. We will determine our own future. Are we ready?

I cannot predict what the future of ebooks will look like, but I do predict that the next few years will be as exciting as the last few. What are your thoughts regarding recent events?

1. I can't figure out why libraries and librarians got all upset over the fact that Amazon keeps information and privacy issues and yet completely IGNORE the fact that Freading keeps reading history for ever as long as I know.

2. At this point (no eBook or $85 for a title) I think Harper Collins Model looks pretty darn good.

3. Yes, 61% may prefer to purchase but that's still a pretty healthy number of people who would like to borrow ebooks from the library.

Read that Pew study carefully and realize that it says 40%+ of us e-read, BUT when you analyze the true figures, it reveals that the percentage reading EBOOKS is only 21%. The larger figure includes reading articles online and reading on a regular PC, so it is amazing to me that the figure is not 80% or more! More importantly, the actual number using ebooks is still only 1/4 of the population. The figure I want to know is how many of the 20% are library users and how many still use both print and ebooks? In terms of studies of book-buying behavior based on library exposure, LJ's Patron Profiles has a study that demonstrates library patrons buy books as a direct result of their exposure to various authors at the library.

There is one journal on evidence based librarianship: http://ejournals.library.ualberta.ca/index.php/EBLIPA search for e-book found 6 articles, at least one on public libraries. Each number has a section of summaries on current research projects, too.

I like ebooks when traveling. I prefer print when reading at home. There seems to be a lot of hype and it's hard to separate the intention to spur ebook sales and actual usage.I see value in both digital and print but suspect that print will be around for many decades to come.

The privacy of the printed book is something that I treasure, not because I read anything particularly controversial, but because I don't like to make it easy for people to monitor me.

At the same time, I have enjoyed reading the electronic versions of a number of books in the public domain. I will be a slow adopter of e-books because so much of it requires that you identify yourself by using a credit card, membership, or installing software on your computer.

I look forward to a time when an open-source e-reader is released that offers far less traceable content. Until then, the printed word is still my refuge.

Good article but I think that we are still looking at the old models. I think that self publishing is making a huge upsurge and the younger gen, will be looking to that for their primary pleasure reading source. I also believe that public libraries, who are seeking validity in today's culture, are relying on ebooks to bring back the patrons that we have lost - the more affluent patron.

I have never once as an adult checked out a print book from the library. But then I bought a Nook, and I've checked out 15+ e-books in the last year. But it's a pain - I have to plug my Nook in to my computer, download the book to Adobe Reader, and then move it to my Nook. It sounds simple, but trust me it's not. After the books check themselves back in (which I love), there are "residue files" left on my Nook that I can't get rid of. Finally, most of the books available are B-list books I have no interest in.

I'm just a reader - I don't know which industries will make or lose money in various scenarios. But it seems like the fight over money has erected some ridiculous barriers between readers and books, which doesn't serve any of us.